Readers' comments

On utility pricing linked to RPI. If the regulators understood RPI and agreed prices as RPI + or - x, they will still be happy with that. No change. If regulator wants to move to new index it would be RPIJ + x - y where y is a typical difference between RPI and RPIJ. Still no change.
Possible utility price changes is a canard.

Changing the CPI calculation encourages banks to print faster. When the US changed the way the CPI was calculated in the 90s, the bank printed faster to peg the new CPI at 3%. Had the old CPI calculation still been in effect, we might have averted some of the Y2K and housing bubble silliness. Along with the endless bank bailouts that followed.

I know about as much about social housing in Britain as I do about the RPI, but if they fiddle with the RPI to get a lower inflation rate, wouldn't that also mean that rents on social housing would increase more slowly?

I wonder which would cost the government more - high bond yields or more heavily subsidized housing rents.

If RPI is higher than 'real' inflation, it could bode ill for England's poor. Wouldn't their rents would rise faster than their incomes. Maybe that needs to happen, but it seems like a sneaky way to do it: bond holders get richer, the poor get poorer.

Or do I have it backwards? Does the State rent the homes on behalf of their occupants? If that were the case, the government would be getting hit on both fronts: landlords and bond holders get richer and the taxpayer gets poorer.

If the government were to start indexing inflation differently for borrowing and spending, (to keep social housing rents low and bond yields high), that could have serious consequences?

The RPI also seems to be more volatile than the other measures. If inflation indexed bonds are bought as a risk free asset, might they trade decreased returns for decreased risk?

You are wise. I will follow this thread with interest, not because I own any British Bonds or live in any social housing. But because my Federal government is thinking about switching to a "Chained CPI." Here's the link to The Economist's Democracy in America posting:

“He who knows not and knows not he knows not: he is a fool - shun him."
"He who knows not and knows he knows not: he is simple - teach him. "
"He who knows and knows not he knows: he is asleep - wake him."
"He who knows and knows he knows: he is wise - follow him.”
To which I would add:
"He who knows not and KNOWS that he knows not is wise."
My definition of wisdom is:
"Wisdom is the knowledge of the limits of our knowledge."

The classical argument would be that knowledge per se is not an end in itself.
The wise would strive to live a good life; hence, the need for knowledge of what is "good"(ethics), what is "life" (ontology), and what is "what is?" (epistemology).

Fiat money should depreciate like most anything else; just print the year, month of issuance on the banknotes and establish the optimal depreciation rate related to some metrics that reflect the state of the national economy - maybe compared to a basket of relevant economies either in the geographical area or some global average, weighted or not on some specifics and so on.
The main purpose for such feature of fiat money would be to directly implicate politicians, investors in exercising due diligence.
Markets, exchanges, central banks are supposed to do the above... but somehow they fail.